Suddenlink grows subs, reports a loss
Cequel Communications, which controls Suddenlink, reported higher revenues in nearly every segment except advertising for both its fourth quarter and fiscal 2009. The company reported a smaller annual loss.
Improved revenue was due largely to increases in revenue generating units (RGUs), the company said. Suddenlink lost basic subs but gained customers for its digital video, internet and phone services to add approximately 43,900 total RGUs in the quarter, and 185,800 over the year.
The company also claimed growth in the SMB market during the year.
The company reported double-play penetration as of the end of the quarter was 37.5 percent and triple-play penetration was 16.6 percent, for a total bundle penetration of 54.1 percent.
Fourth quarter revenue of $398 million was up 6.2 percent compared to the prior year. Revenue for the full year of 2009 of $1.565 billion were up 9 percent compared to the prior year.
The company’s Q4 loss was larger than the previous year’s – $19.1 million in the quarter just completed against a $2.6 million deficit in Q4 ’08. Suddenlink said that was largely due to debt service.
Suddenlink still managed to narrow its yearly loss by a significant amount, to $43.4 million in ’09 from $67.9 million in ’08.
Operating costs and expenses rose 4 percent, primarily due to higher programming costs, the company said, increased broadcast retransmission expenses and increased telephone service costs, offset in part by lower marketing expenses and lower circuit expenses.
“We are proud to report solid 2009 performance, despite a challenging economic environment,” said Suddenlink’s chairman and CEO Jerry Kent.
Kent also said, “Our capital investment program, Project Imagine, will help us retain a technological advantage over our competitors, and we’re very excited about the initial operational performance we are seeing from the investment.”
The company reported that capital expenditures for the three months ended December 31, 2009 were $84.1 million, compared to $53.9 million for the three months ended December 31, 2008, and $247.4 million for 2009 compared to $231.9 million for 2008.
In the fourth quarter 2009, the company began the first phase of its 3-year bandwidth investment plan, which the company refers to as Project Imagine. This investment is expected to provide additional capacity to launch video on demand services into new areas, additional capacity for high definition channels and increased Internet speeds a few additional communities. Capital expenditures for Project Imagine were approximately $34.9 million during 2009.
For 2010, Suddenlink said it expects the full year capital expenditures to be approximately $330 to $335 million, which includes Project Imagine capital expenditures.